FR: Merchandise Trade

May 10, 2017 01:45 CDT

Consensus Actual Previous Revised
Level E-6.0B E-5.35B E-6.57B E-6.43B

The seasonally adjusted trade balance was in a E5.35 billion deficit in March, down from a slightly smaller revised E6.43 billion in February.

The improvement reflected a 3.8 percent monthly rise in exports that easily more than offset a 0.8 percent increase in imports. The former found support from a stronger performance by manufactures while imports were held in check by lower energy purchases.

Despite the decline in March, the first quarter shortfall was still some E19.88 billion, a hefty 48 percent increase versus the fourth quarter and the most red ink in six years. Weakness here contributed to total net exports subtracting a sizeable 0.6 percentage points off quarterly real GDP growth at the start of the year.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. Given the size of the French economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.